How do I get a Free Business Credit Card?

There are a number of ways to get a free business credit card, but it’s wise to consider what each card offers and how it impacts, positively or negatively, personal and business credit. It’s been suggested that for credit building purposes people seek only those cards that impact business credit solely. Plenty of cards are available for free that either are taken out in the name of the business owner (and only considered personal credit) or that commingle personal and business credit, and these may be considered as strong enough credit references when people seek larger business loans.

Of course, for those starting a business, it may be hard not to begin with using personal credit history to obtain a free business credit card, even if the business is highly valued. In this case, people may simply search the Internet, or possibly even talk to their bank about the issuance of a business credit card. Specifying the card must have no fees is important, since there are some cards that assess annual fees or transaction fees. Most people will find several free business credit cards and can do some comparing between them.

One thing to compare is interest rate. A card with a small annual fee and a very low interest rate might be preferable to one with a higher rate and no annual fee. It very much depends on whether the card will maintain a balance. Maintaining a balance, particularly a large one, is usually not recommended since it adds to business expense and uses available credit, which may reflect poorly on credit rating.

As previously stated, the majority of free business credit cards may ask for personal credit information, especially if a business is new. Only a small percentage of lenders don’t ask for this. People will need to supply their social security number (if US citizens), address, and income level. Applications will then ask questions about a person’s business. These include legal business name, tax identification number, value of the business, number of employees and type of business. All this information should be at hand when people fill out an application.

Since credit card companies usually consider personal credit, it may be very hard to obtain a free business credit card if credit is poorly rated. Companies that offer no fees and the best rates look for those people most likely to pay back loans, and credit ratings have shifted since 2008. Good credit ratings are now in the 700s. If a person is searching for a free card, it’s a good idea to assess current credit rating first, and do a little credit repair if needed. Paying down personal loans might help, for instance.

When it seems impossible to get a free business credit card due to poor business credit or personal credit, consultation with a financial advisor could be useful, as part of a strategy to improve business and personal creditworthiness. In the interim, virtually any bank will issue debit or ATM cards to a business. These look just like credit cards, typically come without fees, and can be used in most of the places a business credit card is used.